Allergan’s Buying Spree Rolls On

The Ireland-based pharma company makes a $1.7 billion offer to acquire Tobira Therapeutics, a US firm developing liver disease drugs.

By Bob Grant | September 21, 2016

WIKIMEDIA, ANONAllergan, the Dublin-headquartered pharmaceutical company, is maintaining its mergers and acquisitions activity with a $1.7 billion offer to buy San Francisco–based Tobira Therapeutics, according to a joint statement the firms released yesterday (September 20). Allergan has its sights set on Tobira’s experimental therapies for non-alcoholic steatohepatitis (NASH), a common comorbidity of type 2 diabetes characterized by inflammation, fat accumulation, and cellular damage in the liver.

“The acquisition of Tobira is a strategic R&D investment within a white space area of our global Gastroenterology franchise and an opportunity to advance the development of novel treatments for NASH,” Allergan CEO Brent Saunders said in the statement. “With the increasing rates of diabetes, obesity and other metabolic conditions in the U.S. and in developed nations globally, NASH is set to become one of the next epidemic-level chronic diseases we face as a society. It is important that we invest in new treatments today so that healthcare systems, providers and patients have treatment options to face this challenge in the coming years.”

Some analysts questioned the high premium Allergan is offering ($28.35 per share in cash, about six times Tobira’s $4.74 per share closing price on Monday). Like Vitae, Tobira recently suffered a clinical trial setback when its lead NASH drug candidate, cenicriviroc, failed to hit its primary endpoint in a midstage trial. “What is interesting is Allergan appears to be buying biotech assets that the market views as ‘questionable’ or relatively disappointing,” wrote Michael Yee, a biotechnology analyst with RBC Capital Markets, in a note to investors quoted by Bloomberg.

Allergan’s coffers were filled last year, when Teva Pharmaceuticals bought Allergan’s generics division in a deal valued at $40.5 billion. Earlier this year, a proposed $152 billion merger between Allergan and Pfizer was scrapped, as US regulators made new rules designed to discourage American companies from shifting their headquarters to foreign countries in order to avoid paying US corporate taxes.